AN EMPIRICAL STUDY ON REAL EXCHANGE RATE AND ECONOMIC GROWTH IN TURKISH ECONOMY

Abstract

In this emprical study the affair between the real effective exchange rate and economic activity for
the Turkey was analyzed. As in the case of Uddin et al. (2014), which is the direction of the affair
between real effective exchange rate and economic activity, the existence of a bidirectional
relationship is generally determined. However in our research, the presence of the affair between
economic activity and the real effective exchange rate for Turkey's economy, Granger causality
(Granger causality) was tested. The industrial production index and the real effective rate are used
during the period of 1995-2019. According to the obtained results, unilateral relationship from the
real exchange rate to economic activity has been determined.